California had a banner year in solar installations in 2012, bringing the state 391 megawatts closer to its goal to install 3,000 megawatts by 2017.

According to a California Solar Initiative progress report by the Public Utilities Commission, those additions represent a 26% growth from 2011. The state is now equipped to produce 1,629 megawatts of solar energy across completed projects at nearly 168,000 sites -- enough to power 150,000 homes.

Evan Gillespie, a deputy director with the Sierra Club’s Beyond Coal Campaign, said the progress was significant. “We had our largest year ever for rooftop solar with nearly 400 megawatts. That’s more than most states have to date,” he said. “That in itself is critical.”

The initiative is a rebate program for the state’s investor-owned utilities -- Pacific Gas and Electric, Southern California Edison and San Diego Gas and Electric -- with the broad goal of making solar a self-sustaining market in California. It’s the largest program of its kind in the U.S., with a budget of nearly $2.4 billion, according to the report.

The bulk of that money has been poured into incentives, per-watt rebates that have gradually declined as the solar industry grows. This is on top of the federal Solar Investment Tax Credit -- 30% of the cost of each residential or commercial system is paid back to the owner of the home or business -- and the net metering that accounts for all but 92 megawatts of the state’s existing solar capacity. Net metering doles out energy credits to customers for the solar power they produce but don’t consume, easing the strain of monthly electric bills.

The commission report also highlighted projects in the initiative’s low-income program, which attracts applications for small-scale projects at single-family homes. These installations make up about 8.5 megawatts of solar capacity, with another 1.8 megawatts on the way in pending projects. The initiative’s multifamily affordable solar housing program is already contributing 18.4 megawatts, and 11.3 megawatts are expected with the completion of 83 more projects.

“Customers are choosing solar at a time when there are all sorts of major challenges to traditional energy,” Gillespie said, citing the shutdown of the San Onofre Nuclear Generating Station. California’s major utilities are scrambling to draft a long-term plan to make up for the lost power. As officials consider their alternative options, Gillespie said, “It’s amazing that rooftop is now ready to play an integral role in energy that San Onofre would have provided.”

Even as the initiative scales back its rebates, the demand from customers holds strong. California is now 66% of the way toward meeting its 2017 goal, with an additional 19% in pending projects.

“These 167,000 homes, schools and businesses [who have already installed solar projects] -- they’ve all made the choice that the cheapest thing they can do for their energy bill is to put solar on their rooftop,” Gillespie said. “This report is just the latest indicator we’ve got a new, huge industry that has tremendous demand from the public.”